IMPEDIMENTS TO EFFICIENT DEPLOYMENT OF DISTRIBUTED RESOURCES

COMMODITY COSTS$/KW OR $/KWH

• Capital cost of equipment– internal combustion engines– gas turbines– micro turbines– fuel cells– photovoltaics– wind turbines

• Operating costs

Internal Combustion Gen Sets

• Installed capital costs are high

• Non-fuel operating costs are high

• Fuel costs are high

• Limited on-site thermal sales opportunities

Gas Turbines

• Installed capital costs are high

• Fuel costs are high

Micro Turbines

• Installed capital costs are high

• Fuel costs are high

• Operating costs are high

• Technology unproven

Fuel Cells

• Evaluated on the promise of substantially lower annual operating costs

• High capital costs

• Expected stack life of fuel cells is relatively short and require significant replacement capital costs

Solar and Wind

• Availability of resources

• Availability of land

Commodity Cost Main Point

• On a commodity dollars per kilowatt-hour or per-kilowatt basis against established coal and natural gas fired generating plants, DR faces an uphill battle…...

Interconnection Issues

• Interconnection– Access charges to distribution system– System upgrades

• Operation and dispatch

• Reliability issues

• Worker safety

Other Issues

• Environmental concerns

• Local citing issues

• Standby charges• Fuel supply

PRICING OF STANDBY POWER

• Cost of service perspective– 100% of DG load usually req’d to be reserved– Supplier must stand ready to meet the potential

requirements of all its customers– Provider of last resort concept– Insurance concept– Transmission & distribution cost recovery

• Market based approaches

Potential Benefits From Distributed Resources

• Wider customer choice

• Potential to supply 100% of end user needs

• Potential for improved power quality and reliability in conjunction with host utility service

Likely Role For DR In Competitive Generation

Environment

• Primarily “niche” markets

• Short term fix for distribution system constraints

• Uninteruptible Power Supply (UPS)

• Green Markets

• Isolated locations

Biographical Sketch

Richard A. VoytasSupervising EngineerCorporate Planning, Ameren Services

Phone: (314) 554-3025Fax: (314) 554-4679

Current responsibilities at Ameren Services include market modeling, resource planning including non-utility generation analysis/coordination, load analysis and forecasting and load research. Prior positions at Ameren include: Interconnection Arrangements, Rate Engineering, Power Operations, Fossil Fuel Procurement and Engineering and Construction.

Academic background includes a B.S. in Mechanical Engineering from the University of Missouri-Rolla and a MBA from St. Louis University. I am a registered professional engineer in the state of Missouri.